Southerly bluster but wins in the west

September 30, 2012. Mark it in your diaries, because it’s the exact date when the brash “new money" mining powerhouse of Perth will supplant the “old money" leather-Chesterfield-couch-loving business community in Melbourne.

In just over nine months, global mining giant
BHP Billiton
will have finished moving into its giant new skyscraper in the middle of Perth’s central business district, shifting its 3000-odd WA staff, and no doubt a few more from Melbourne, under the one roof.

It’s hard to ignore the metaphor that BHP’s homage to mammon presents for the shift of power from the east of the country to the west.

Looking like a steel-clad Minotaur of ancient Greek times, the charcoal-grey “horned" building dominates Perth’s skyline unlike anything since Alan Bond’s overly ambitious BankWest tower was erected in the heady late 1980s.

In a nice Freudian moment, BHP’s new tower, while having more girth, is ever so slightly shorter than the state headquarters of fellow global titan
Rio Tinto
(which is in the nearby Central Park building).

Rio also has the edge in the mining stakes in WA at the moment, with bigger iron ore operations.

BHP furiously denies the completion of the building will mark the shift of its Australian corporate and funding headquarters from Melbourne to Perth, and points to its recent lease in Collins Street as a sign of its commitment to the Victorian capital.

But with the resource giants generating more than 70 per cent of their global profits from the iron-rich dirt of WA’s Pilbara region, the caper is up.

Related Quotes

Company Profile

BHP’s loyalty to Melbourne is almost quaint, much like Melbourne Football Club fans somehow believing next year they will be able to postpone the weekend trip to the Victorian ski fields because their team will be playing well.

The Big Australian’s once-tight relationship with its Melbourne bankers has been weakening for a while now, and it feels like there are more Sydney and Melbourne-based bankers operating on a fly in, fly out basis to the Perth capital, searching for work, than miners lugging their tool kits to the mines in WA’s arid north.

Some, like Swiss house UBS, are attempting to beat the rush and establish offices in the west.

To stretch the Melbourne versus Perth money analogy even further, that other veritable Victorian institution, the Australian Football League, now relies on WA for much of its funding – through the television rights deal engineered by Perth-based Seven West Media group, controlled by
Kerry Stokes
.

Of course there’s also the wet-lettuce-leaf battle between WA Treasurer
Christian Porter
and his Victorian counterpart,
Kim Wells,
over the redistribution of the nation’s GST. Porter likes to point out that Victoria, with not much of a mining industry, enjoys about $1.5 billion a year in redistributed mining royalties from WA via the Commonwealth Grants Commission carve-up of the GST pie.

Then there’s the donation by WA of GST revenues to the east.

But we won’t go into that.

Regardless, it leaves the vague air of Melbourne clinging to its former glory like some rusted-on followers of Victorian footy clubs who secretly know that one day they have to relocate to Tasmania.

Note: WA has better weather too.

All this presents an opportunity for Perth to get a massive chip off its shoulder.

In Perth, barely can the words “there’s a new bar/restaurant opening" be uttered than follows: “Of course they’ve been doing it in Melbourne for years."

Yes, Perth coffee is the nation’s most expensive.

Yes, you can’t get good service in Perth because all the waiters are earning $120,000 driving trucks for half the year in the mines, and yes, Melbourne actually has laneways in which to put small laneway bars.

In Perth, there is also this rather twee idea in some restaurants that charging $40 for an entree of, say, cheese toasties, is a good thing.

The top price for a pint of beer in Perth stands at $18, but like the ASX, its stocks are bound to climb eventually.

Blame the bulging wallets of the former table-waiting, truck-driving, hospitality crew.

Perhaps an influx of people from Melbourne is just what is needed to inject some urban chic.

Of course there is a danger in all this western hubris.

WA’s coffers are being filled by rapacious demand for iron ore from China.

Trade with the Middle Kingdom now accounts for more than a quarter of the state’s annual economic output.

Should that relationship falter, the state’s fortunes would tumble faster than the tower of Babel.